The Hispanic American Financial Experience, a new study released today by Prudential Financial (NYSE:PRU), found that the Hispanic American community is moderately confident in their future outlook for household finances, the local and national economy, and the attention paid to their needs by the financial industry and government. In addition, the Hispanic American community places a priority on funding near-term goals such as supporting their multigenerational families. These factors, according to the study respondents, make it difficult for the Hispanic American community to prepare for long-term financial security.
The 2014 study also found that the complexity of programs such as Social Security, a lack of access to work-based retirement plans and limited contact from financial advisors are additional barriers for this community in achieving their long-term financial goals.
While retirement planning can be daunting, the study shows that Hispanic Americans face distinct challenges. According to the study, more than twice as many Hispanic Americans as the general population (15 percent compared with 6 percent), say that supporting elderly family members is a financial priority, and 31 percent of Hispanics place importance on funding education for children or grandchildren, compared with just 18 percent of the general population.
“The study shows that many Hispanic Americans have clear financial goals, but they may be unsure about how to achieve them,” said George Castineiras, senior vice president of Total Retirement Solutions at Prudential Retirement. “We see an underestimation of how much money may be required to retire, a fact evidenced in part by lower participation in workplace-based retirement plans, lower rates of investing and longer expected time in the workforce, with three out of every four expecting to continue working during retirement.”The focus on shorter-term financial objectives may hinder their ability to set goals for savings and retirement. The study also revealed that Hispanic Americans have less access to workplace-based retirement plans and, even when they do have access, they are still less likely to contribute to retirement plans.